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Who knows where the economy will be by the time Congress settles things.

But if there is any near certainty, it is that the latest bout of uncertainty that the nuttiness in Washington has injected into an already wobbly economy will keep interest rates at their historically low levels for some time to come.

Ben Bernanke and the Fed over the summer flirted with cutting back on the multitrillion-dollar home buyer subsidy program amid signs of a modest improvement in the economy.

But of course Big Ben beat a hasty retreat in September after the Fed’s well telegraphed intentions started to push up rates and spook the housing market.

Now with the threat of a slowdown or even a full blown Depression looming should Congress force the government to default on its debt payments, there’s zero chance the Fed will be backing off from its $85 billion a month mortgage bond buying program anytime soon.

President Obama’s choice of Janet Yellen to fill Bernanke’s shoes — she’s a strong supporter of the Fed’s cheap money policies — all but seals the deal, as economist Elliot Eisenberg notes in his daily “Laughs and Graphs” blog.

Here’s Elliot, the former chief prognosticator of the National Home Builders Association:

“Given the government closure and resulting lack of economic data, the fact that Q3 GDP growth will be below 2% and that inflation remains very tame, virtually guarantees that tapering will not commence following the conclusion of the late October Fed interest rate setting meeting. Now with the formal nomination of Janet Yellen for the post of Chairman, I’m 100% sure tapering will not commence before January.”

This is big news for home buyers — today’s low interest rates, hovering now at 4.25 percent for a 30-year mortgage, represent a massive government subsidy.

At current levels, interest rates shave as much as 30 percent off the average monthly mortgage payment, at least compared with
more historically normal rates of 7 or 8 percent.

It’s hardly all gravy. There is a strong argument to be made that home buyers still pay for it all by having to pay more for the same house.

But frankly most home buyers, for good or ill, aren’t looking at it that way.

Shiller sees some signs of trouble

In a recent New York Times piece, housing guru Robert Shiller, Yale economist and cofounder of the Case-Shiller index, concludes we are not yet back in full bubble mode.

Yet Shiller sees some signs of trouble looming on the housing horizon.

I was struck by one number in Shiller’s piece: Home prices, after being adjusted for inflation, shot up 18.4 percent during the 18 months ending in July.

That’s not much off from the 22.7 percent increase during the 16 months leading up to the peak of the housing bubble back in 2004, Shiller noted.

Still, while homeowners show signs once again of losing touch with reality amid a spate of double-digit price increases, we are not quite back to the delusional thinking about home prices that prevailed when the last housing bubble peaked in 2004/2005, Shiller points out.

He points to a Case-Shiller survey of recent buyers across the country that was taken over the summer.

Shiller makes much of this difference, and who am I to argue?

Still, I think it’s odd to compare what homeowners are thinking now — very early in the current housing rebound — to the attitudes back in 2004 and 2005, which, after all, followed years of escalating prices.

Home prices had begun to take off again as far back as 2001 and 2002.

In fact, the buy-now-before-you-get-priced-out mania was already taking hold back in 2002, when my wife and I bought our Natick fixer-upper. There was a big difference from when we started looking in early 2001, when there were OK options below $300,000, and when we bought in July 2002, when prices for anything decent were already well beyond that point.

By comparison, the current housing rebound, recovery, bubble-in-the-making, or whatever you want to call it, is still relatively young, barely a year-and-a-half old.

Let’s just say it could be very interesting to see what home buyers and sellers are thinking a year or two down the line, especially if home prices continue on their double-digit tear.

Scott Van Voorhis is a freelance writer who specializes in real estate. For the full Boston Real Estate Now blog, visit www.boston.com/realestate.

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